BackStake sales in state-run firms to begin in the June quarter, says Arvind Panagariya
The public sector in India is no larger than in most other countries; the difficulty is the composition, says Arvind Panagariya
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New Delhi: Stake sales in state-run units are expected to start in the April-June quarter of the next financial year, said Arvind Panagariya, vice-chairman at Niti Aayog.
Niti Aayog will also review the outcomes of various policy measures and schemes of various ministries on a monthly basis to ensure the government’s spending delivers the intended outcome, the top boss of the think tank said at The Verdict, a conference organized by Mint and CNBC-TV18 on the Union budget on Thursday.
Niti Aayog chief executive Amitabh Kant said the think tank had put in a lot of effort to prepare the outcome budget for the ministries.
“The very integral component of the budget is the outcome budget, which we prepared across ministries. And this is for the first time that we have done this. So, there are clearly defined outcomes for every single ministry and this will bring in good governance. This will bring in accountability. All this is being put on (the) dashboard. This will be regularly monitored on a monthly basis," said Kant.
In response to a query about outperformers, Kant said, “We have been doing this for quite some sectors for the Prime Minister actually and so far the roads sector has done quite well."
The Union budget has allocated Rs67,000 crore for the national highways in 2017-18 as compared to Rs57,676 crore in 2016-17.
Finance minister Arun Jaitley also showed the way for public sector firms’ reforms in the budget 2017 through streamlining operations. He announced the planned creation of an energy behemoth by merging various public sector firms in the oil and gas sector. India has 298 central public sector enterprises or CPSEs, of which 235 are operational.
“The public sector in India is no larger than in most other countries. The difficulty is the composition; government being in activities where the private sector can do it, and in activities that are not serving a public purpose. So, the government needs to come out of the activities that are not serving a public purpose and focus on areas where public sector is very important," Panagariya said.
This comes in the backdrop of the National Democratic Alliance government plans to raise Rs72,500 crore through disinvestment of CPSEs, as articulated by the budget last week. The government was able to garner Rs45,500 crore out of a disinvestment target of Rs56,500 crore for the current financial year.
“On privatization, we did pull together very quickly— after very detailed discussions—a list of about 17 enterprises for privatization, which has been approved by the Cabinet. The ball is now in the court of the finance ministry," Panagariya said adding that the process is underway at the Department of Investment and Public Asset Management.
“I am expecting the first sale to happen in the very first quarter of 2017-18," added Panagariya.
Niti Aayog’s vice-chairman also said that discussions were underway on a public sector asset rehabilitation agency (PARA) or the so-called bad bank, wherein there is a possibility of using the existing private sector asset reconstruction companies (ARCs) and strengthening them.
“There is still need to think through exactly in what form one does it. One idea that has been floated is the government-backed ARC. There is also the possibility of using the existing private sector ARCs and strengthening them so that you can have a competition among them if you were to auction some of these assets through the market-run process," Panagariya added.
The Economic Survey has suggested that a bad bank be set up to rescue banks buried under a mountain of bad loans. Such an institution can be funded by government securities, an equity infusion from the private sector, or by using the Reserve Bank of India’s excess capital, the survey said.
Gross non-performing assets of 41 listed banks reached Rs6.7 trillion at the end of September.
Finance minister Arun Jaitley said last week that a road map for scrapping the Foreign Investment Promotion Board (FIPB) that scrutinizes foreign investment proposals will be announced soon as part of the government’s financial sector reforms.
According to Kant, of the total foreign direct investments (FDI) in the country, 93.8% comes through the automatic route.
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